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Mr. Brown: My hon. Friend has an important role in the House as Chairman of the Select Committee on Trade and Industry, and he is right to draw attention to any difficulties facing industry resulting from the inflation generated by the policies of the previous Government. I am aware that it is more important to get it right than to get it quickly; however, I understand that what people need is a framework within which to plan, and that is why we have made the decisions we have announced today. There will be a time of preparation, followed by a time of decision.
Sir Teddy Taylor (Rochford and Southend, East): I welcome very much the unambiguous commitment to the referendum given by the Chancellor today. Will he make it abundantly clear that, while preparations are being made for joining in the event of the single currency being a success, he will make comparable proposals and preparations in the event of the single currency turning out to be an almighty disaster--as some of us think it might? Will he bear it in mind that there is a sincerely held and deep-rooted feeling among members of all parties in the House of Commons that a single European state, without democracy and based on a single currency, will inevitably result in mass unemployment, misery and the sort of instability that we saw at the time of the gold standard?
Mr. Brown: I am not sure whether the hon. Gentleman wants us to make preparations not to join, but I have to tell him that the single currency will affect us whether we are in or out, and it is important that the nation addresses itself to both the difficulties and the opportunities that arise from it. As I said in my statement, only a few days ago Marks and Spencer announced measures that it was taking, and
yesterday National Westminster bank announced training measures in respect of the euro. It is not right for Conservative Members to ask us to have our heads in the sand when events are occurring that affect us directly.
As for our policies on the economy, the policies that we are pursuing to tackle inflation, to keep borrowing under control and to create jobs through reform of the welfare state, are right for Britain anyway.
Mr. Dale Campbell-Savours (Workington):
Is it not true that, if a hard core of countries proceed with EMU at an early stage--before the United Kingdom does so--the inevitable consequence will be a large volume of euro currency circulating within the United Kingdom before the next general election? Personally, I would welcome that.
Does it not follow that, before the next election and before the referendum, many firms in the United Kingdom may well be paying salaries in euro currency, and perhaps even entering into transactions at retail level? In many ways, the approach adopted by my right hon. Friend, which is based on consensus, will ease the path towards the inevitable decision, which I believe will be in favour.
Mr. Brown:
My hon. Friend makes an important and telling point both about the need to prepare and about the fact that this matter will affect us. It is true that euro notes and coins will be in circulation on 1 January 2002--indeed, it may be earlier than that if certain decisions are made--and, although I cannot say when the next election will be, it is possible that it might be held before or after that date. The fact of the matter is that it affects us; we have to be alert to that fact, and we have to prepare. That shows the wisdom of a new policy from the Government today to make preparations.
Mr. William Thompson (West Tyrone):
Does not the Chancellor's statement today about active preparations for a single currency in effect mean that the Government have taken a decision to go in? Will the markets not see it as that, and will business men not see it as that? More important, does not the decision today prejudice any referendum that will be held, because the Government will then say, "All the preparations are made; we can't say no now"?
Mr. Brown:
I think the hon. Gentleman would acknowledge the importance of the European Union, not just in other areas of the continent, but in Northern Ireland, through the work of the European investment bank and other institutions. But I have to tell him that, if we have a Government--as we do--who support the principle of monetary union, who see no constitutional bar to joining, but who realise that the nation is in many ways ill prepared even to take a final decision on these matters, it is right to make these preparations, and that is what we will do. I repeat to the hon. Gentleman: the European monetary union affects us whether we are in or out, and I would be failing in my duty as Chancellor if we did not make the preparations to deal with that.
Mr. Ted Rowlands (Merthyr Tydfil and Rhymney):
May I suggest to my right hon. Friend that rather greater constitutional issues are involved than perhaps his statement indicates? For example, surely a decision that will lead to imposing public expenditure limits and public borrowing limits on all future British Governments is a constitutional issue. If it is a constitutional issue of such
Mr. Brown:
I think that, when my hon. Friend reads my statement in detail, he will see that it says that I accept that there are constitutional implications. What I do not accept is that there is a constitutional bar that outweighs the economic tests as the decisive reason why we might join a single currency. As for his point about public expenditure and taxation, I repeat to him: the measures that we have taken both in the Budget, and in the decisions on other issues around Budget time on public expenditure and everything else, are the measures that are right for Britain. It is right that we follow the fiscal rules that we have set down. These are rules that we set for ourselves.
The decisions that we have taken about inflation and interest rates are also decisions that we have taken for Britain. They are within the terms of the stability pact and within the likely operation of monetary union, and I do not see an inconsistency between pursuing the policies that are right for Europe and the policies of convergence that can make possible a decision on monetary union.
Mr. Eric Forth (Bromley and Chislehurst):
Can the Chancellor tell the House what the constitutional implications are of British membership of economic and monetary union, to which he apparently attaches so little importance?
Mr. Brown:
I said--I hope that the right hon. Gentleman will also read my statement--that we are talking about a pooling of economic sovereignty. I do not deny that that is the case. If monetary union takes place, interest rates are set at a European level and there is European action to deal with the problems of inflation, but I do not myself see that that is a bar to monetary union--that there is a constitutional bar to it. Instead, I believe that the economic advantages outweigh the constitutional implications that no doubt the right hon. Gentleman would want to emphasise.
Mr. Denis MacShane (Rotherham):
The Chancellor referred to setting up a committee of the Governor of the Bank of England, the heads of the CBI and TUC and the heads of the Association of British Chambers of Commerce to discuss this issue, but I invite him to go a little further, because we need to decontaminate the whole terrain of European discussion, which has been poisoned by five years of xenophobic anti-Europeanism, of which we have heard no little expression again this afternoon.
I invite my right hon. Friend to look to the regions: in my constituency, great exporting firms such as British Steel and Beatsons Clark will welcome this clear statement of principle. I invite him to look to the universities; to the representatives of all the employees involved in this. They, too, can take part in this discussion and preparation, so that, when the decision comes, we are ready for it, having made up for the ground lost as a result of the anti-European hostilities of the Conservative party.
Mr. Brown:
One of the problems with what happened during the time in office of the previous Government was that, not only were no preparations made to the necessary level, but no information was flowing about the practical implications of monetary union. As my hon. Friend may
Today I have announced that there will be regional conferences for my hon. Friend's region, for Northern Ireland, for Scotland and for Wales, in which the practical implications of monetary union can be discussed. I believe that that is the responsible way to proceed.
Mr. Howard Flight (Arundel and South Downs):
What the Chancellor has said today is dramatically different from that which appeared on 26 September in the Financial Times. I should like to know why the Chancellor did not contradict it at the time, if Government policy was as described today. I should like to know that the Chancellor and the Prime Minister realise that they have lost the confidence of the financial community that they have been talking about, not just in London but elsewhere, and I should like the Chancellor to assure the House that, on matters as serious as this, leaks of the sort that we have had this summer will cease.
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